San Francisco Bay Area
America’s Second City
By Ken DeLeon, ESQ | Founder
New York City is consistently viewed as the preeminent city in America, and arguably the world. However, the title of “Second City” has been more fluid, in flux from as early as 1890.
Chicago was originally dubbed the Second City to illustrate its status in America. When Los Angeles surpassed Chicago in population in 1984, the informal title of Second City transferred to Los Angeles.
While Los Angeles may be the second most populated city, there are a number of reasons that the second region of greatest import in America should not be determined by a population census, but instead by a broad array of critical factors. Given this premise, there are now strong arguments that the San Francisco Bay Area has rightfully wrested this title from both Los Angeles and Chicago, despite their larger populations. This is true if one compares the four metropolitan regions of New York, the San Francisco Bay Area, Los Angeles, and Chicago across several metrics that measure the strength of each region in innovation, education, culture, and wealth.
EDUCATION
The presence of world-class universities was the genesis of Silicon Valley’s birth, and has propelled the San Francisco Bay Area into prominence in education and innovation. The strength of our local universities is true not only nationally, but also internationally. The Bay Area is the only region in America with three of the top 20 universities in the world, according to the 2017 US News & World Report’s rankings of global universities.
STANFORD (#3) BERKELEY (#4) UCSF (#16) |
NEW YORK COLUMBIA (#9) NYU (#27) |
| LOS ANGELES UCLA (#10) |
CHICAGO U. OF CHICAGO (#13) NORTHWESTERN (#25) |
*2017 US News World Report’s rankings of global universities
WEALTH
This educational excellence has translated into economic exceptionalism. This is best demonstrated by the fact that the Bay Area has more billionaires than either Los Angeles or Chicago.* In the 2016 Forbes article entitled “The Cities with the Most Billionaires,” the San Francisco Bay Area has more billionaires who are worth more money than either LA or Chicago. Of particular note, small Palo Alto, with a population of just 66,642, has as many billionaires as Chicago. Even more impressive, the net worth of these elite Palo Alto residents is greater than the net worth of the billionaires of LA and Chicago combined!
Innovation
As the epicenter of world innovation, it is not a coincidence that Silicon Valley has the only branch of the US Patent and Trademark Office outside of Washington, DC. The “US Patent & Trademark Office: Distribution of Issued Patents by US Region for 2015” illustrated that Silicon Valley dominated the country by the number of patents issued:
Santa Clara County (#1)
Los Angeles (#3)
Chicago (#11)
New York (#22)
The future for the Bay Area is also very bright. A disproportionately large amount of the world’s venture capital funding is managed in Silicon Valley, as discussed in The Atlantic’s “The Global Cities Where Tech Venture Capital Is Concentrated.”
The Bay Area has more top 10 US companies by market cap headquartered here than any other region in America (market cap data provided by dogsofthedow.com).
While the Bay Area is known for its educational excellence, tech savvy, and financial affluence, it is also a rising star in cultural measures. New York had always had the most three-star restaurants in America, until 2016. In the latest Michelin guide, both New York and the Bay Area had six restaurants that garnered the prestigious three-star ranking. While Michelin stopped rating Los Angeles a few years ago, there were no three-star restaurants then, and that would likely be the case now.
I am not the only one to recognize the growing stature and economic strength of the Bay Area. In the Milken Institute’s “2015 Best Performing Cities,” the top two cities in the nation were #1 San Jose/Sunnyvale and #2 San Francisco/Redwood City. The index was created by measuring growth in jobs, wages, salaries, and technology over five years. San Jose had the highest job growth in the nation (4.6 percent) amongst larger cities, and had the second highest wage growth, only behind San Francisco. The study stated that the “economy of the San Jose metro division has been red-hot, demonstrating how an innovation-fueled ecosystem can overcome high costs of doing business and a restrictive regulatory environment.”
San Francisco, very close behind, ranked #2 because of the low unemployment rate of 3.4 percent, and had a labor participation rate that is 10 percent higher than the national average. This allows it to easily absorb the many new residents drawn to what is arguably the nation’s strongest economy. A final illustration of the strength of the Bay Area is that, since 2001, per government data, the gross domestic product of the region has gone up by over 76 percent, compared to 54 percent growth in Chicago, 64.9 percent in New York, and 71 percent in Los Angeles.
The San Francisco Bay area is a special place in the world, and is a top-tier region in so many aspects. DeLeon Realty is honored to be the top team in one of the top two regions of America.
